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HomeMy WebLinkAbout04/03/2001, 2 - AWARD A CONTRACT FOR TRANSIT SERVICES TO FIRST TRANSIT, INC. council M °°BDac April 3,2001 j acEnaa RepoRt 1�N°°b. CITY OF SAN LUIS OBISPO FROM: Mike McCluskey, Director of Public Works Prepared By: Austin O'Dell, Transit Manager SUBJECT: AWARD A CONTRACT FOR TRANSIT SERVICES TO FIRST TRANSIT, INC. CAO RECOMMENDATION 1. Authorize the City Administrative Officer to enter into a three-year contract with First Transit, Inc. to provide operations and maintenance services for SLO Transit for the period July 1, 2001 through June 30, 2004, with the possibility of two one-year extensions for acceptable service. 2. Direct the CAO to implement transit cost savings, and equipment acquisition described in the Fiscal Analysis section of this report. REPORT IN BRIEF The current contract with Laidlaw Inc. for operations and maintenance of SLO Transit expires on June 30, 2001. The City solicits requests for proposals (RFP) for transit operations and maintenance every three years. The City received three proposals on February 9, 2001 from Laidlaw Transit Inc., First Transit, Inc., and Coach USA. The proposals varied in cost by only three percent(3%) from the lowest to the highest cost proposal. A Selection Committee consisting of representatives of Public Works, Finance, and the City Attorney's office evaluated the proposals. The selection criteria included overall understanding of the scope of work, financial stability, and quality of service. After evaluating the proposals, staff is recommending to award the transit services contract to First Transit, Inc. First Transit exceeded all the minimum requirements of the RFP and demonstrated the corporate philosophy, financial stability, and leadership that was superior over the other two proposals. This recommendation represents a change from the current Contractor—Laidlaw Transit, Inc. Laidlaw, Inc., the parent company of Laidlaw Transit, Inc., is financially unstable and represents a risk too high for a recommendation to continue as our transit provider. As expected, the contract cost increased by forty percent (40%) over the current contract cost. In order to reconcile the cost increase with the transit revenues, the City will need to implement both operational and funding strategies. In terms of operational strategy, staff recommends that the City discontinue the Pilot Late Night Service. This Pilot Service was intended to be a six-month trial service to determine the service demand on weekday during the hours from 7:00 p.m. to 11:00 p.m. This service generated only five passengers per hour and a farebox ratio of 2%. Council Agenda Report—A--drd Contract for Transit Services Page 2 The Mass Transportation Committee (MTC) differs. with this recommendation, and offer options discussed in the report. In terms of funding strategies, the City will need to pursue our fair share (representing $70,271 dollars) of TDA funds in the unincorporated areas located within SLO Transit's Service Area. The second funding strategy is to increase the Cal Poly contribution from $187,000 to $233,000. Staff has been communicating with Cal Poly in regards to this matter. The third funding strategy is to implement a fare increase in FY 2002-03 to maintain the State mandatory farebox ratio of 20%. The final funding strategy is to closely review our existing allocation method, and re-consider the current policy regarding the allocation of indirect costs. Staff will work with the MTC to acquire their input as these strategies are develop into City Council recommendations. DISCUSSION The current service contract for operations and maintenance for SLO Transit services expires on June 30, 2001. In consultation with the MTC and Cal Poly, the request for proposals (RFP) for a new contract was developed. At its meeting of December 12, 2000, the Council approved the RFP and authorized the CAO to solicit proposals for operations and maintenance of SLO Transit services within the City. A pre-proposal meeting attended by ten transit contractors was held on January 9, 2001 to respond to questions regarding the RFP and to clarify service requirement issues. On February 9, 2001, the City received three proposals for the service contract. Responding contractors included Laidlaw Transit, Inc. (the current provider), First Transit, Inc. and Coach USA, Inc. The three proposals were reviewed by a City Selection Committee, which included members from the Public Works Department, City Attorney's Office and Finance Department. Attachment 2 outlines the entire ranking process regarding the received proposals.. All three proposals varied in style, focusing on the key issues that each of the contractors felt were important for delivering quality service for the City of San Luis Obispo. As Council will recall from the RFP process, a major restructuring of the contract is being undertaken. In essence, the contractors were asked to provide proposals which reflected as much on quality of service, employee vitality and attitude as well as the more common cost issue. Each proposal was ranked on a series of criteria that the Selection Committee deemed important for comparing each of the submitted scopes of work. All three contractors were asked to participate in oral interviews with the Selection Committee to answer questions regarding their proposals, introduced the City to their corporate attitudes and demonstrate their philosophies for providing the quality transit service that are important to SLO Transit. Each of the contractors demonstrated an aptitude for providing transit service for our City. However, one firm, First Transit, Inc. clearly demonstrated a corporate attitude, financial stability and proposed work team that was superior to the other two proposals. The First Transit,Inc. Proposal—Quality First In general, not only did the First Transit proposal meet minimum requirements, it exceeded them. The First Transit proposal contains many new and innovative ideas that lead them to be the consensus candidate contractor for our services. Highlights of these elements are: n �-2 Council Agenda Report— - and Contract for Transit Services Page 3 • Passenger Attitude and Service. The overwhelming philosophy in the First Transit proposal was that passengers come first - an interesting play of words on the name of their company. In order to restore public perception of the SLO Transit system this type of corporate attitude for our transit provider is a must. • Driver Attitude and Service. First Transit recognizes the value of its experienced drivers. As result, First Transit is committed to hiring the current driver labor force and providing a $500 sign-on incentive bonus. First Transit has innovative employee incentive programs that are designed to increase morale of the employees. First Transit also proposes to improve driver wages for the SLO Transit employees in order to proactively hire new drivers and also retains quality drivers that will perform our transit service. • Resident Manager — A leader in the Industry. The First Transit proposed Resident Manager, Kim Blakeman, is an innovative leader in transit industry. While with Seattle Metro, he implemented an innovative transit system strategy that optimized feeder van service to the basic fixed route bus system to increase ridership and access to the public transportation system. This service design is now being used as models in other communities in the nation and might be a possibility here in San Luis Obispo. • Company Profile. The financial health of First Transit is solid. First Transit has published profits for the past four years and will likely continue as a growth leader in the transit industry. • Maintenance Tracking Software and Hardware. First Transit clearly led all other proposers in the use of innovative techniques and information services to keep costs low. As part of their proposal, First Transit will be providing a maintenance software package that will monitor the preventative maintenance and overall health of each SLO Transit vehicle. This software is proven and tested and is already used by First Transit nationwide to track vehicle performance and optimize parts distribution and cost recovery. In addition, First Transit will make the information and reports available to the City so that vehicle replacement and performance monitoring can be closely tracked. This information should help the City in better scheduling major vehicle rehabilitation and replacement — a service we currently do not receive. No other proposal offered a proven maintenance package to the City that would provide this service. • Experience with similar services. First Transit currently provides similar service to the SLO Transit system at several transit properties in California, which include the following: Foothill Transit Authority, Kern County Transit, Los Angeles Metropolitan Transit Authority, and San Diego County Transit. The Selection Committee recognized that the proposed project team demonstrated substantial experience that will benefit the SLO Transit system and lead to smooth transition of contractors. Based on staffs reference check as part of the evaluation process, the transit properties highly recommend First Transit. Cost The First Transit proposal is a substantial increase over the current contract costs for transit services. It is important to note that all three of the proposals were in excess of the current contract �2 �3 Council Agenda Report—f...and Contract for Transit Services Page 4 and were very similar in proposed yearly cost. Because the RFP was specifically structured so that the award of this contract should not be on cost alone, but rather on service quality issues (responsiveness, the ability to demonstrate a qualified project team, and financial ability) the City was able to reduce the proposed contract service cost by fine tuning the First Transit proposal to the priority elements that we feel will benefit our community. A detailed description of the funding issues for the transit contract is described in the Fiscal Analysis section of this report. Laidlaw Transit,Inc—Why a change in contractors? Changing service contractors, particularly for transit services, is always a difficult task and decision for a community to make. Normally, an existing contractor's insight into the current service levels and community lead to a significant advantage when re-bidding for contract services. So why was Laidlaw not the choice for the upcoming transit service contract? Financial.Instability In essence, the potential risk of corporate and operational changes in Laidlaw Transit was just too high for a continued recommendation as our transit service provider. Laidlaw, Inc., the parent company of Laidlaw Transit, Inc, is financially unstable. As part of any multi-year service contract entered into by the City, the financial stability of the contactor is a critical issue. Attachment 3 is a memorandum from the Director of Finance that explains the auditor's statement for Laidlaw, Inc. as an on-going concern. As identified in that report, Laidlaw, Inc. is financially insolvent and will require a major restructuring in the next few years. While unknown at this time as to what that restructuring may consist of, there is no doubt that significant operating changes, cost savings measures and possible sale of solvent subsidiaries (such as Laidlaw Transit, Inc.) may take place. Why is this important to SLO Transit and the City? By its very nature, transit service must be reliable and dependable. Because it is unknown what changes may be required at Laidlaw Transit to meet the needs of it's parent corporation, there is no assurance that service levels and performance of employee may not suffer during the next contract period. These changes might even include the acquisition of Laidlaw Transit by another company to provide the parent corporation with additional revenue. Cost—Not an Issue All three of the proposals were very similar in the operations proposal prices for the City SLO Transit contract. In fact, the basic contract costs for all the three proposals varied by only three percent (3%) on a potential $1.9 million dollar annual contract. With all three contract proposals being so close, costs of each service provider became a minor issue for the selection committee in comparing the proposals and obtaining final rankings for the contractors. 1 Council Agenda Report —%. .drd Contract for Transit Services Page 5 Public Image and Operational History It is only fair to acknowledge some of the difficulties we have experienced with the current Laidlaw Transit contract. The pair of transit related fatalities experienced in 1999 and 2000 was not normal for the City of San Luis Obispo nor for Laidlaw. However, the public perception of the safety of the SLO Transit system suffered tremendously as a result, and Laidlaw's response to these issues- was not ideal. Concerning corporate management philosophy and consistency, Laidlaw in the last three years, has assigned three different Resident Mangers to the SLO Transit system and this has resulted in ever changing management styles for the SLO Transit employees and patrons. The current Resident Manager has been doing a good job of addressing some of these operational issues and has improved the public perception of SLO Transit. However, as stated in the discussion above, staff remains critically concerned that restructuring of the Laidlaw Corporation may have dramatic effects at the local level, which could result in problems similar to those we have experienced. It is important to note that Laidlaw Transit has done a fair job in assisting the City in providing transit service thus far. By no means should the Council, or the community, believe that Laidlaw Transit is not a company that could provide the basic transit service for SLO Transit. However, the issues as identified above all lead to a staff recommendation that Laidlaw Transit is not the best contractor to perform our transit service at this time. FISCAL ANALYSIS The cost of providing transit service for the next three years will be as follows: Table 1 —Annual Contract , CCosts �r7 � FY 2001-02 $1,732,600 FY 2002-03 $1,825,850 FY2003-04 $1,870,000 As anticipated, current market conditions have lead to a significant cost increase in the transit service contract. These costs represent a change of 40% from the current contract levels. So with this tremendous increase, how will SLO Transit balance its annual budget? Transit services are provided by funds from the State of California Transportation Development Act (TDA), the State Transportation Assistance (STA), operating assistance from the Federal Transit Administration (FTA), and the farebox. Based on projections of transit funding sources, the acquisition of new funding and implementing changes in service levels, SLO Transit will be able to remain fiscally healthy if the following operational and funding strategies are implemented. A final transit budget on these issues will be incorporated in the FY 2001-03 Financial Plan. a -s - Council Agenda Report—:award Contract for Transit Services Page 6 Operational Strategy Discontinue Pilot Program for Late Night Service The City needs to'discontinue the Pilot Late Evening Service. This service was implemented in September 1999 for a six-month trial basis to determine the service demand and success of late night evening transit service. To say the least, the demand and success of this demonstration program have been abysmal. Staff first identified this issue in mid-2000 and recommended to the MTC that.the service be discontinued. After healthy discussion, the MTC requested continuation of the service for an additional period and that additional marketing be provided to promote the service prior to discontinuation. A direct marketing campaign for this service was undertaken in fall 2000 to coincide with the Cal Poly fall quarter. After promotional efforts, late evening service still generates only five passengers per hour and a farebox ratio of 2%. As a result of the Pilot Late Evening Service, SLO Transit's farebox ratio has fallen below the State regulatory standard of 20%; thus, SLO Transit is in jeopardy of loosing its STA funds. It is important to note that costs reflected in Table 1 already assume reduction in late night service. The Pilot Late Evening Service demonstrated that service demand on weekdays from 7:00 p.m. to 11:00 p.m. was insufficient and unproductive to continue the service on a permanent basis. Thus, it is necessary to direct the public's money where it does the most good. MTC considered the discontinuation of late night service at their regular meeting on March 14, 2001. The MTC did not concur with staff's recommendation and instead recommended to Council two alternatives, which will be discussed.as part of the Concurrence Section later in this report. Funding Strategies Additional TDA Allocation—SLO County Apportionment Another necessary endeavor is to pursue the City's fair share of TDA funds for transit services in the unincorporated areas located within SLO Transit's service Area. SLO Transit's service area encompasses primarily the city limits, and also some of the unincorporated areas of the County, which include Orcutt Road, Foothill Road, Cal Poly, and the Airport,. TDA guidelines specifically allow transit providers to claim TDA funding for basic transit services provide beyond their jurisdictional boundaries. Because the City is the primary transit provider in these unincorporated areas, the City should receive compensation from the TDA apportionment for these services. Based upon review of existing funding levels, Cal Poly housing population estimated at 2800, the City's additional apportionment from TDA would be approximately $70,271 or 2.5 % of the County's current TDA allocation. Precedent has already been set for this request. Annually, the City receives State Transit Assistance (STA) funding on behalf of Cal Poly residents. Obviously this issue will result in a nominal loss in TDA revenue that the County uses for streets and road maintenance. However, additional maintenance revenues such as the 2000-01 Governor's apportionment are now available to the County for road repair and as such the small loss in TDA should not overly burden existing service levels. Representatives from the City,.County, and SLOCOG will pursue this matter. a- � Council Agenda Report —E,..and Contract for Transit Services Page 7 Cal Poly Contribution Staff has coordinated the cost increases for the proposed contract with representatives of Cal Poly. While increases in the transit contract cost result in increased revenues being requested from Cal Poly to continue the Zero Fare Program, Cal Poly staff has acknowledged the need to keep pace with current industry costs in providing this service. Table 2 indicates the estimated Cal Poly contributions that would be necessary for the proposed contract. Table 2—Cal Poly Zero Fare Vim - I faDiJ FY 2001-02 $233,096 FY 2002-03 $240,089 FY2003-04 $247;292 Cal Poly has indicated that they are addressing the Zero Fare issue on two fronts. First, the University is pursuing an increase to their parking pass cost with a percentage going to cover the transit subsidy shortfall. If the increase does not receive approval through the University's approval system, Cal Poly proposes to institute a user fee for the Zero Fare Program similar to that proposed in Fall 2000 to cover the transit subsidy shortfall. The current Cal Poly agreement for the Zero Fare Program is scheduled to expire this fiscal year. As such, a new agreement will be returning to Council in the next few months, which will solidify these funding issues based upon the success of Cal Poly in funding the subsidy shortfall. Fare Increase The Transit Manager has forecast funding and expense levels for SLO Transit service based upon current cost and budget assumptions. It does not appear that a fare increase is required to cover the difference for the new contract cost proposal for FY 2001-2002. However, based upon service levels, farebox recovery ratios and savings assumptions in the above items, annual farebox revenues may not meet the minimum 20% recovery ratio required under TDA and STA guidelines. As a result, a fare increase may be needed in an upcoming future year (possibly as early as FY 2002-03) to meet legislative requirements for these funding sources. Staff will be working the next few months and into next fiscal year to determine if fare increases will be necessary and instigate appropriate actions to address ridership concerns. MTC will have the opportunity to review the matter of a fare increase and make a recommendation to the City Council. City Indirect Costs As part of the current FY 2001-03 Financial Plan, all above mentioned funding issues will be reviewed. However, even if all of the above items are accomplished there may still be a small shortfall in the transit budget. A last strategy would change the current policy regarding allocation of indirect costs. It is important to remind ourselves that the primary concern of the Transit Enterprise Fund is to maintain the highest level of transit service for our citizens. Currently, the transit fund is charged fees for various City operational service costs for monitoring, review and support of transit issues. Similar to the Golf Fund, it may become necessary that the a - � Council Agenda Report—Ayvard Contract for Transit Services -- Page 8 Council review a policy of having the General.Fund support some indirect administrative costs for the transit system. The CAO has great reservation about this strategy, however, and it is unknown at this time if this policy decision will be necessary. Lastly, the Finance Department will closely review the indirect cost allocation methodology to ensure its consistency to all City operations. CONCURRENCES Concurrence 1. The City Selection Committee, consisting of staff from the Departments of Finance, Public Works, City's Attorney's office, and Maintenance have evaluated the proposals and concur with the CAO Recommendation. Concurrence 2. Issues of Cal Poly contributions towards the Zero Fare Program have been reviewed with Cal Poly staff and written correspondence may be forthcoming prior to the Meeting of April 3, 2000. Concurrence 3. As previously mentioned, the MTC was involved in the development of the RFP, which sets the level of service desired by the City. The proposed contract will implement this level of service. The MTC bylaws, however, do not include public contracting responsibilities (typically not within the purview of any City advisory bodies), and therefore the proposed contract itself has not been taken to the MTC. In addition, there are confidentiality clauses associated with such proposals that would inhibit public review at the evaluation and interview stage. The MTC will, however, have input into some of the long-term funding strategies discussed in this report. The issue of discontinuation of Late Night Service was considered by the MTC at its March 14th meeting. The MTC did not concur with staff's recommendation and instead recommended to Council two alternatives: 1) Continue Late Night Service at its existing service levels. The MTC was not specific as to how this service should be funded but felt that no reduction should be made at this time. 2) If fixed route Late Night Service is discontinued, the City should replace it with some form of demand response service. Staff does not concur with the MTC recommendations at this time. Final funding levels and budget issues will need to be resolved prior to committing limited funds to service hours that have repeatedly not demonstrated sufficient demand to warrant continuation nor meets farebox recovery requirements. The issue of late night service and how best to implement an appropriate level of service and cost level should be addressed in the upcoming Short Range Transit Plan (SRTP) update scheduled for FY 2001-02. . It is possible that as part of that SRTP process, late night demand response service may be possible and implemented to provide additional services. Concurrence 4. Staff has consulted with the City Attorney's to review the fairness and integrity of the selection process. As result, the City Attorney's Office concurs that the Selection Committee utilized a fair process to conclude with the recommendation to award the SLO Transit Services contract to First Transit. �1\ Council Agenda Report-h..and Contract for Transit Services Page 9 ALTERNATIVES Alternative A - The Council may decide to delay the award of contract for operations and maintenance of public transit fixed route services. This delay could potentially jeopardize the successful contractor's ability to organize a smooth transition and service start-up particularly for employee retention. A major delay of any sort in awarding a contract could result in interruption of transit service if adequate time is not given to the successful contractor to implement the necessary transitory actions. Alternative B. Award the contract to First Transit, Inc. but give staff additional direction regarding the service level changes and funding assumptions described under the Fiscal Analysis section to address MTC concerns and recommendations. Attachments: Attachment 1 - Draft Agreement for First Transit and the City of San Luis Obispo for Operations and Maintenance for Public Transit Fixed Route Services Attachment 2 —Proposal Review and Ranking Process Description Attachment 3 - Memorandum from the City's Director of Finance regarding the Auditor's Statement hCouncil Agenda Reports\CAR SIA Transit Award 2001 v2.doc �- 9 ATTACHMENT 1 *** DRAFT *'�* AGREEMENT BETWEEN CITY OF SAN LUIS OBISPO AND FIRST TRANSIT INCORPORATED G:\Transit\Transit Current Projects\Operations RFP\Procurement Period\Agreement.doc J r n TABLE OF CONTENTS No. TOp1C page Agreement Cover 1. Purpose 4 2. Scope-of-Work 4 3. Time Period 4 4. Maximum Obligation 4 5. Price Formula 4 6. Invoice 6 7. Payment 6 8. Farebox Revenue 6 9. Control 6 10. Management 6 11. Medical Assistance to Passengers 7 12. Uniforms 7 13. Modifications of Agreement 7 14. Contract Assignments 7 15. Disputes 7 16. Stop-Work 8 17. Termination 8 18. Communications 9 19 Proprietary Rights 10 20. Shortages and Delays 10 21. Audit 10 22. Transportation Data Reporting 11 23. Workers' Compensation 11 24. Contractor's Employee Responsibilities i 1 25. Transit Employee Protective Agreements 11 26. Insurance 12 27. Letter of Credit 14 28. Fidelity Bond 14 29. Prime Contractor Responsibilities 14 30. Nondiscrimination 14 31. Disadvantage Business Enterprise 15 32. Conflict of Interests 15 33. Conflict of Transportation Interests 15 34. Title to Supplies and Equipment 15 35. Headings 16 36. Retention of Records 16 37. Right to Adequate Assurance of Performance 16 38. Indemnification 16 GATransit\Transit Current Projects\Operations RMProcurement Period\Agreement.doc _/ No. TOp1C Page 39. Merger 16 40. Additional Services 17 41. Changes in Scope-of-Work 17 42. Conflicting Use 17 43. Liaison 17 44. Failure to Perform 17 45. Liquidated Damages 18 46. Waivers 18 47. Interpretation, Jurisdiction, and Venue 18 48. Severability 18 49. Debarred Bidders 18 50. General Equipment-Requirements 18 51. Public Contact Code Section 10162 Questionnaire 19 52. Integrity Certification 19 53. Energy Conservation 20 54. Air Pollution 20 55. Notice of Federal Requirements 20 56. Environmental Violations 20 57. Privacy 20 58. Arbitration 20 59. Disclosure of Lobbying Activities 20 60. Non-Collusion Affidavit 21 61. Interest of Members of or Delegates of Congress 21 52. Drug-Free Workplace 21 63. Contractor's Representations, 21 64. Contractor's Eligibility 21 65. Program Fraud and False or Fraudulent Statements and Related Acts 21 66. Governing Law 22 67. Patent Rights 22 68. Attorneys' Fees 23 69. Year 2000 Compliance 23 70. Recycled Products 24 71. Access Requirements for Individuals with Disabilities 24 GATransit\Transit Current Projects\Operations RMProcurement Period\Agreement.doc o7-/ ' J AGREEMENT THIS AGREEMENT is by and between the CITY OF LUIS OBISPO, California, hereinafter referred to as "CITY" and "FIRST TRANSIT INCORPORATED", hereinafter referred to as "Contractor". WITNESSETH WHEREAS, Contractor has the management and technical personnel, expertise and other assets useful for the support of City's transportation project; and WHEREAS, Contractor is desirous of providing such services;. NOW, THEREFORE, in consideration of the foregoing recital and covenants and agreements of each of the parties herein set forth, the parties hereto do agree as follows: 1. Purpose. City hereby contracts with Contractor to provide transportation management, maintenance, and operations services upon the terms and conditions hereinafter set forth. 2. Scope-of=Work. Contractor shall provide the services set forth in Exhibit A, supplemented by Exhibit B except when inconsistent with Exhibit A. Subject to the terms and conditions set forth in this agreement, Contractor will provide the services to be rendered as set forth in the Scope of Work in Exhibit A and subsequent addendums per Form 1.3 attached hereto and by reference incorporated herein and made a part hereof. 3. Time Period. The term of this agreement shall be from July 1, 2001 to June 30, 2004, inclusive, with an option to extend for two one-year terms starting July 1, 2004 and ending June 30, 2006. Contractor-shall commence transit service operations of City's transportation project on July 1, 2001, and continue operation through June 30, 2004 within the budget defined under the heading "Maximum Obligation". 4. Maximum Obligation. City agrees to pay Contractor in consideration for its services as described herein. The maximum cost to be paid by City to Contractor shall not exceed $1,732,599 during the first year; $1,825,838 during the second year; $1,869,676 during the third year. The fourth and fifth subsequent years, City and Contractor shall mutually negotiate the price formula. 5. Price Formula. The price formula will be based on a two (2) tiers. City agrees to pay the Contractor for performance of the service set forth in this Agreement as follows: G1Transit\Tmnsit Current Projects\Opemtions RMProcurement Period\Agreement.doc a-�a 1\ a. Tier 1. Payment of a fixed mileage rate for revenue service as follows: Fixed Mileage Rate Fiscal Year Per Revenue Mile 2001-02 $3.62 2002-03 $3.82 2003-04 $3.91 b. Tier 2. Payment of the incremental fixed mileage rate for the electronic registering farebox system as proposed in Exhibit B as follows: Incremental Fixed Mileage Rate Fiscal Year Per Revenue Mile 2001-02 $0.24 2002-03 $0.24 2003-04 $0.24 Contractor shall agree to the terms and condition Paragraph 50 of this Agreement.. Revenue vehicle miles will be calculated by determining the mileage of the actual distance that each bus travels during revenue service. Revenue vehicle miles during revenue service are solely based upon the published route alignment approved by City.. Mileage and time from the garage to the first scheduled service stop and the mileage and time from the last scheduled service stop to the garage are excluded. Time for driver meal break are specifically excluded from use in the price formula. The revenue mileage rate shall compensate Contractor for vehicle operator's wages and fringe benefits, purchase of bus pans and components, purchase of fuel, oil, lubricants, grease, batteries, mechanic supplies, antifreeze, and tires, bus cleaning supplies, radio maintenance. The revenue vehicle mileage rate assumes all variable and consumable costs of the Contractor with the exception of heavy maintenance. Refer to Exhibit A, Scope-of-Work. c. City Responsibilities. City shall provide the facilities located at 29 Prado Road, San Luis Obispo, California, which includes Operations Offices, dispatch area, driver's lounge, garage and parking facilities, licensed mobile radio system and radio system maintenance, vehicles and licenses, tickets, coupons and transfers, coupon and ticket sales, printed timetables, service marketing and promotion, service planning and system monitoring. In addition, City shall provide for printed bus schedules and other marketing brochures. GATransit\Transit Current Projects\Operations RMProcurement Period\Agreement.doc U 6. Invoice. Contractor shall submit monthly invoices to City for services provided as follows: all revenue vehicle mileage costs. Services and reimbursements shall be invoiced to City not later than the tenth (10th) day of the month following the service month provided. No charge will be allowed for missed revenue vehicle miles during revenue service. Fixed monthly rate shall be billed monthly. All required reports and submissions as described in attached Exhibit A, shall be accurately completed and submitted to City prior to payment of monthly fee. 7. Payment. All payments by City shall be made in arrears after the service has been provided. Payment shall be made by City no more than thirty (30) days from City's receipt of the invoice. Payment will be made on a monthly basis. If City disputes any items on an invoice for a reasonable cause, City may deduct that disputed item from the payment but shall not delay payment for the undisputed portions. The amounts and reasons for such deletions shall be documented to Contractor within fifteen (15) working days after receipt of invoice by City. City shall assign a sequential reference number to each deletion. Payments shall be by voucher or check payable to and mailed first class to: 8. Farebox Revenue. All farebox revenues collected by Contractor are the property of City. Operating revenues include all fares, sales of tickets and passes, and advertising sales. Contractor shall be responsible for handling farebox revenues in the manner discussed in attached Request for Proposal, Section 3 and as necessary for City to meet state and federal funding requirements. 9. Control. In performing the services under this Agreement, the Contractor shall act as an Independent Contractor and shall have full control of the work and the manner in which it is performed. Contractor in no circumstances shall be considered as an agent or employee of City, and Contractor's employees are not entitled to participate or be part of any pension plan, insurance, bonus, or any similar benefits, which City provides its employees. A certificate must be completed and submitted with the bid (Refer to Certification 2.7). 10. Management. During the terms of this Agreement, Contractor shall provide sufficient executive administrative personnel as shall be necessary and required to perform all duties and obligations under the terms hereof, and described in attached Exhibit A, Scope-of-Work. All management personnel to be employed must be committed exclusively to the performance of work on City's project and shall not perform any G:\Tmnsit\Tmnsit Current Projecis\Operations RMProcurcment Pcriod\Agrcement.doc other services for Contractor or other entity. Management personnel shall be full-time employees of Contractor. 11. Medical Assistance to Passengers. Contractor's employees shall not be required to perform any medical or quasi-medical functions for passengers. In the event of illness on board a vehicle, the driver shall advise the dispatcher by radio and may proceed immediately to a medical facility for help, on the instructions of dispatcher. 12. Uniforms. Contractor shall purchase uniforms as specified by City for all employees and shall require the employees to wear them in accordance to Exhibit A, Scope of Work. The design, type and logo of the uniforms shall be subject to City's approval. Uniforms shall include, but not be limited to shirts, pants and jackets. Drivers shall be required to maintain neat and clean appearances. 13. Modifications of Agreement. This writing constitutes the entire Agreement between the parties relative to the matter of this Agreement and no modification hereof shall be effective unless and until such modification is evidenced in writing signed by both parties to this Agreement. There are no understandings, agreements or condition with respect to the subject matter of the Agreement except those contained in this writing. 14. Contract Assignments. This contract shall not be sold, assigned, transferred; conveyed or encumbered by Contractor without the prior written consent of City. Contractor shall not sell or otherwise transfer its interest in this contract without prior written notification to City. Upon receiving such notification from Contractor, City may, at its sole discretion, decide to exercise its right to terminate this contract. Subject to the provision regarding assignment, this contract shall be binding upon the heirs, executor, administrators, successors and assigns of the respective parties. 15. Disputes. Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed or by agreement shall be decided by City's Transit Manager, who shall produce his decision to writing and mail or otherwise furnish a copy thereof to Contractor. The decision of the Transit Manager shall be final and conclusive unless a written appeal is furnished by the Contractor to City's Public Works Director within thirty (30) days from the date of receipt of such copy. The Public Works Director shall review said appeal within forty-five days of receipt and shall determine the validity of the appeal. The decision of the Public Works Director shall be final and conclusive unless within thirty (30) days from the date of receipt of such copy, Contractor mails or otherwise furnishes to City's City Council a written appeal. The decision of City Council for the determination of such appeals shall be final and conclusive unless determined by arbitration under the rules of the California Arbitration Act (CCP 1280-1294.2) to have been determined fraudulent, or capricious, arbitrary, or GATransit\Transit Current Projects\Operations RMPmcurement Period\Agr ment.doc o7_��, so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this clause, Contractor shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of said dispute as describe herewith, the Contractor shall perform all required duties and obligations of the contract during the dispute resolution process and at not time shall service be interrupted due to conflict resolution. This paragraph does not preclude consideration of questions of law in connection with decisions provided for in this clause, provided that nothing in this contract shall be construed as making final decision of any administrative official, representative or board on a question of law. Please refer to Paragraph 58. 16. Stop-Work. City may stop work on its transportation system upon forty-eight (48) hours written notice to Contractor. City shall be liable for all relevant costs defined under Section 6 incurred prior to the stop-work period and for restart, if any. 17. Termination. The contract may be terminated for .reasons of City's convenience or Contractor's breach or insolvency. Notice of termination shall be accomplished by registered, or certified mail. a. Termination for Convenience. City may terminate this contract, in whole or in part, at any time by written notice to the Contractor when it is in the City's best interest. The Contractor shall be paid its costs, including contract closeout costs, and profit on work performed up to the time of termination. The Contractor shall promptly submit its termination claim to City to be paid the Contractor. If the Contractor has any property in its possession belonging to City, the Contractor will account for the same, and dispose of it in the manner City directs. b. Termination for Breach or Cause. If the Contractor does not deliver supplies in accordance with the contract delivery schedule, or, if the contract is for services, the Contractor fails to perform in the manner called for in this contract, or if the Contractor fails to comply with any other provisions of this contract, City may terminate this contract for default. Termination shall be effected by serving a notice of termination on the contractor identifying the manner in which the Contractor is in default of this Contract. The contractor will only be paid the contract price for supplies delivered and accepted, or services performed in accordance with the manner of performance set forth in the contract. If it is later determined by City that the Contractor had an excusable reason for not performing said service, such as a strike, fire, or flood, events which are not the fault of or are beyond the control of the Contractor, City, after setting up a new delivery of performance schedule, may allow the Contractor to continue work, or treat the termination as a termination for convenience. GATransit\Transit Current Projects\Operations RMProcurentent Period\Agreement.doc c. Opportunity to Cure. City at its sole discretion may, in the case of a termination for breach, default, or cause allow the Contractor ten (10) days in which to cure the defect. In such case, the notice of termination will state the time period in which cure is permitted and other appropriate conditions. If Contractor fails to remedy to City's satisfaction the breach or default or any of the terms, covenants, or conditions of this Contract within ten (10) days after receipt by Contractor or written notice from City setting forth the nature of said breach or default, City shall have the right to terminate the Contract without any further obligation to Contractor. Any such termination for default shall not in any way act or operate to preclude City from also pursuing all available remedies against Contractor and its sureties for said breach or default. d. Waiver of Remedies for any Breach. In the event that City elects to waive its remedies for any breach by Contractor of any covenant, term or condition of this Contract, such waiver by City shall not limit City's remedies for any succeeding breach of that or of any other term,covenant, or condition of this Contract. e. Termination for Default. If the Contractor fails to deliver supplies or to perform the services within the time specified in this contract or any extension or if the Contractor fails to comply with any other provisions of this contract, City may terminate this contract for default. City shall terminate by delivering to the Contractor a Notice. of Termination specifying the nature of the default. The Contractor will only be paid the contract price for supplies delivered and accepted, or services performed in accordance with the manner or performance set forth in this contract. If; after termination for failure to fulfill contract obligations, it is determined that the Contractor was not in default, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of the City. 18. Communications. All notices hereunder and communications with respect to this Agreement shall be effective upon the mailing thereof by registered or certified mail, return receipt requested, and postage prepaid to the persons named below: If to Contractor: Mr. Craig Smedman 10805 Holder Street, Suite 25 Cypress CA 90630 GATransit\Transit Current Projects\Operations RMProcurentent Period\Agreetnent.doc , J With Copy to: Richard C. Clair, President One Centennial Plaza 705 Central Avenue, Suite 500 Cincinnati, OH 45202 If to SLO Transit SLO Transit 955 Morro Street San Luis Obispo, CA 93449 Attn: Transit Manager All other communications, invoices, reports, etc., shall be made to the Transit Manager of City. 19. Proprietary Rights. All inventions, improvements, discoveries, proprietary rights, patents and copyrights made by Contractor under this Agreement shall be made available to City with no royalties, charges or other costs, shall be governed by the provisions of 49 C.F.R 18.34. All manuals prepared by Contractor under this Agreement shall be made available to City at no charge and become property of City. The required financial and activity reports per other sections of this Agreement are excluded from this provision and shall be owned by City. City may make presentations and releases relating to the project. Any report, public releases, papers and other formal publications shall be subject to the approval of City, and if appropriate, the Federal Government, before they are released. 20. Shortages and Delays. Contractor shall not be held responsible for losses, delays, failure to perform, or excess costs caused by events beyond the control of.Contractor. Such events may include, but are not limited to, the following: Acts of God, fire, epidemics, earthquake, flood, or other natural disaster; acts of government or public, riots, war, civil disorder, or fuel shortages. However, Contractor shall not receive payment for the revenue vehicle mileage rate and only the mutually agreed during the period of time that service is not provided. Contractor also grants City the right to provide these services through other means on a temporary basis should Contractor be unable to perform said services. 21. Audit. Contractor shall comply with the following: . (a) General. Contractor shall permit the authorized representatives of City, San Luis Obispo Council of Governments, State of California, the U.S. Department of Transportation, and the Comptroller General of the United States to inspect and audit all data and records of the Contractor relating to performance under this Agreement. Contractor shall submit quarterly an unaudited report of actual expenditures (both direct and indirect costs) per the Uniform System of Accounts (Section 15). Gt\Transit\Transit Cutmnt Projects\Opemtions RPP\Procumment Period\Agreement.doc C3 (b) Audit Settlement. At any time, City may, at its own cost, conduct or have conducted an audit of the Contractor. If the audit determines that City's dollar liability for Contractor's services is less than payments made by City to Operator, then Contractor will pay the difference in cash to City, or, at City's option, credit. such overpayment against any future amounts owed by City to Contractor. If the. audit determines that City's dollar liability for services provided under the contract is more than payments made by City to Contractor, then City will pay the difference to Contractor in cash. 22. Transportation Data Reporting. Contractor will collects and report operating and financial data to City in accordance with the California Public Utilities Code; Chapter 4, Section 99243, and California Administrative Code Title 21, Chapter 3, Subchapter 2, as required under California Transportation Development Act, and of the Uniform Financial Accounting and Reporting Elements (FARE) as required under FTA National Transit Database (formerly known as Section 15 of the Urban Mass Transportation Act of 1964). 23. Worker's Compensation. Contractor certifies that it is aware of the provisions of the Labor Code of the State of California, which requires compensation and understands self-insurance requirements in accordance with the provisions of that Code, and it certifies that it will comply with such provisions before commencing with the performance of the work of this Agreement. 24. Contractors' Employee Responsibilities. Employees shall at all times remain the sole employees of Contractor, and Contractor shall be solely responsible for payment of all employees' wages and benefits. Contractor, without any cost or expense to City, shall faithfully comply with the requirements of all applicable State and Federal enactments with respect to employer's liability, workers compensation, unemployment insurance and other forms of Social Security, and also with respect to withholdings of income tax at its source from wages of said employees. Contractor shall indemnify and hold harmless City from and against any and all liability, damages, claims, costs and expenses of any nature arising from alleged violation of such enactments or from any claims of subrogation provided for in such enactment or otherwise. The Contractor shall comply with the requirements of FTA Grant Agreement, Part H, Section 119(b). 25. Transit Employee Protective Agreements. (I) The Contractor agrees to the comply with applicable transit employee protective requirements as follows: (a),General Transit Employee Protective Requirements - To the extent that FTA determines that transit operations are involved, the Contractor agrees to carry out the transit operations work on the underlying contract in compliance with terms and conditions determined by the U.S. Secretary of Labor to be fair and equitable to protect the interests of employees employed under this contract and to meet the employee protective requirements of 49 U.S.C. A 5333(b), and U.S. DOL guidelines at 29 C.F.R. Part 215, and any amendments thereto. These terms and conditions are identified in the letter of certification from the U.S. DOL to FTA applicable to the FTA Recipient's. GATtansiffransit Current Projects\Operations RMProcurement PeriodWgreement.doc project from which Federal assistance is provided to support work on the underlying contract. The Contractor agrees to carry out that work in compliance with the conditions stated in that U.S. DOL letter. The requirements of this subsection (1), however, do not apply to any contract financed with Federal assistance provided by FTA either for projects for elderly individuals and individuals with disabilities authorized by 49 U.S.C. § 5310(a)(2), or for projects for nonurbanized areas authorized by 49 U.S.C. § 5311. Alternate provisions for those projects are set forth in subsections (b) and (c) of this clause. (b)Transit Employee Protective Requirements for Projects Authorized by 49 U.S.C. 5310(a)(2) for Elderly Individuals and Individuals with Disabilities - If the contract involves transit operations financed in whole or in part with Federal assistance authorized by 49 U.S.C. § 5310(a)(2), and if the U.S. Secretary of Transportation has determined or determines in the future that the employee protective requirements of 49 U.S.C. § 5333(b) are necessary or appropriate for the state and the public body subrecipient for which work is performed on the underlying contract, the Contractor agrees to carry out the Project in compliance with the terms and conditions determined by the U.S. Secretary of Labor to meet the requirements of 49 U.S.C. § 5333(b), U.S. DOL guidelines at 29 C.F.R. Part 215, and any amendments thereto. These terms and conditions are identified in the U.S. DOL's letter of certification to FTA; the date of which is set forth Grant Agreement or Cooperative Agreement with the state. The Contractor agrees to perform transit operations in connection with the underlying contract in compliance with the conditions stated in that U.S. DOL letter. (c) Transit Employee Protective Requirements for Projects Authorized by 49 U.S.C. 5311 in Nonurbanized Areas- If the contract involves transit operations financed in whole or in part with Federal assistance authorized by 49 U.S.C. § 5311, the Contractor agrees to comply with the terms and conditions of the Special Warranty for the Nonurbanized Area Program agreed to by the U.S. Secretaries of Transportation and Labor, dated May 31, 1979, and the procedures implemented by U.S. DOL or any revision thereto. (d) The Contractor also agrees to include any applicable requirements in each subcontract involving transit operations financed in whole or in part with Federal assistance provided by FTA. 26. Insurance. The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). GATransiffrr=sit Current ProjwAOperations RMProcurement Period\Agreement.doc 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. Minimum Limits of Insurance. Contractor shall maintain limits no less than: 1. General Liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage. If Commerciai General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability`. $2,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the ,Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents and volunteers are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied or used by the Contractor; or automobiles owned leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official, employees, agents or volunteers. 2. . For any claims related to this project, the Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees,agents and volunteers. Any insurance or self-insurance maintained by the City, its officers; officials, employees, agents or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. GATransit\Transit Current Projects\operations RPP\Procurement Period\Agreement.doc a -a. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Verification of Coverage. Contractor shall furnish the City with a certificate of insurance showing required coverage. Original endorsements effecting general liability and automobile liability coverage are also required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. Subcontractors. Contractor shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 27. Letter of Credit. Prior to execution of this Agreement, the prospective Contractor shall furnish to City a Letter of Credit (LOC) in the amount equal to.Two Hundred Thousand Dollars ($200,000). The Letter of Credit (LOC) shall be made payable to City and shall be held by City throughout the term of this Agreement to guarantee performance by Contractor. 28. Fidelity Bond. During the period of time this Agreement shall be in effect, Contractor shall cause its staff personnel to be covered under an appropriated bond protecting City from employee theft up the amount of fifty thousand dollars ($50,000) with respect to any single occurrence by Contractor's employees. Contractor shall furnish City with a certificate from it fidelity bond carrier showing proof of such coverage. Said coverage shall provide for notification of City directly by Contractor's,bond carrier at least fifteen (15) days in advance in the event of cancellation or change of such coverage. 29. Prime Contractor Responsibilities. Contractor is required to assume responsibility for all services identified in this Contract whether or not Contractor Possesses skills to perform said services within its organization. City will consider Contractor to be the sole point of contact with regard to contractual matters, including payment of any and all charges resulting from the contract. No subcontract will be entered into by Contractor to perform work relating to this Agreement without the prior written authorization of City. 30. Nondiscrimination. a. Contractor shall comply with all applicable federal, state and local laws, rules and regulations with regard to discrimination in employment because of age, race, religion, color, sex, physical, or mental disability, marital status or national origin. Contractor shall take affirmative action to insure that applicants are employed and that employees are treated during their employment without regard to their age, race religion, color, sex, physical or mental disability, marital status or national origin. Such actions shall include, but not be limited to, the GATransit\Transit Current Projects\Operations RPP\Procutemcnt PerlodWgreement.doc following: employment, upgrading, demotions or transfer; recruitment or recruitment advertising; layoff or termination; rate of pay or other forms of compensation; and selection for training, including apprenticeship. b. Contractor shall also comply with the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and with all applicable regulations, statutes, laws, etc., promulgated pursuant to the civil rights acts of the state and federal government now in existence of hereafter enacted. Further, Contractor shall also comply with the provisions of Section 1735 of the Labor Code. C. , The Contractor agrees to comply with applicable requirements of the Americans with Disabilities Act of 1990, as in reference to FTA Grants Agreement, Part H. 31. Disadvantaged Business Enterprise. In connection with the performance of this Agreement, Contractor will cooperate with City in meeting City's commitments and goals with regard to the maximum utilization of Disadvantaged Business Enterprise. 32. Conflict of Interests. Contractor agrees that it presently has no interest, which would conflict in any manner or degree with the performance of its services hereunder. Contractor further agrees that in the performance of this contract, no person having such interest shall be employed. A certificate must be completed and submitted with the bid (Refer to Certification 2.8). 33. Conflict of Transportation Interests. Contractor shall not divert any revenues, passengers or other business from City's project to any taxi or other transportation operation unless directed by the City. 34. Title to Supplies and Equipment. Title to supplies and equipment is described below. In the event parts, supplies, and equipment purchased by Contractor in connection with the performance of this Agreement are fully reimbursed or purchased by City, they shall become the property of City. Contractor agrees to the following: a. City's Beginning Inventory. Contractor shall agree to purchase City's bus parts, components, and supplies, fuel, oil, lubricants, cleaning supplies, antifreeze, batteries, and other consumable items at City's cost upon the execution of this Agreement. City reserves the right to purchase any portion of the ending inventory from the Contractor. Payment will be reconciled on the last day of this Agreement. b. Contractor. Bus parts and supplies shall be purchased by the Contractor and shall be the property of the Contractor. The Contractor shall maintain a reasonable spare inventory. At all times the Contractor shall maintain a complete and accurate inventory listing of available parts including item name and description, purchase price, quantity, and location of each part. GATransit\Transit Current Projects\Operations RMProcumment Period\Ageement.doc _^/ 35. Headings. The headings or titles to sections of this Agreement are not part of the Agreement and shall have no effect upon the construction or interpretation of any party of this Agreement. 36. Retention of Records. Contractor and City agree to retain all documents relevant to this Agreement for four years from the termination of the contract or until all Federal/State audits are complete for the fiscal year, whichever is later. Upon request, Contractor shall make available these records to City, State, or Federal government's personnel. 37. Right to Adequate Assurance of Performance. Both Contractor and City entering this Agreement accepts their obligation with the expectation of receiving due performance that will not be impaired. When commericially reasonable grounds for uncertainty arise with respect to the performance of either party, the other may, in writing, demand adequate assurance of due performance and until assurance is received, may, if commercially reasonable, suspend any performance for which the agreed return has not been received. "Commercially reasonable" includes the conduct of a party with respect to performance under this Agreement, and also conduct of a party with respect to other Agreements with parties to this Agreement or others. After receipt of a justified demand, failure to provide assurance within a reasonable time, not to exceed thirty (30) calendar days, such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of this Agreement. Acceptance of any improper delivery, services or payments does not.prejudice the aggrieved party's right to demand adequate assurance of future performance. 38. Indemnification. Contractor hereby warrants that all its work will be performed in accordance with generally accepted professional practices and standards as well as the requirements of applicable federal, state, and local laws, regulations and ordinances. It being understood that acceptance of Contractor's work by City, shall not operate as a waiver or release of Contractor. Contractor will be responsible for obtaining any and all permits at its expense and shall indemnify, hold harmless and defend City its agents, and employees from and against any and all actions, claims, damages, environmental contaminations and spills, disabilities or expenses, and witness costs that may be asserted by any person entity arising out of or in connection with the activities necessary to perform the services and complete the tasks provided for herein whether or not there is concurrent passive or active negligence or willful misconduct of City, except where the claim is based solely on the negligence or willful misconduct of City. This indemnification obligations not limited in any way by any limitation of the amount or type of damages or compensation payable by or for the services and tasks described in this Agreement or its agency under Workers' Compensation acts, disability benefit acts or other employee benefit acts. 39. Merger. This contract sets forth the entire agreement between the parties with respect to subject matter thereof, and supersedes and replaces all proposals, negotiations, representations and implied obligations. The obligations, liabilities and remedies set GATransiffransit Current Projects\Operations RMProcumment Period\Ageement.doc a a� forth herein are exclusive and shall operate as limitations on any action brought in connection with the said services, including an action in tort. 40. Additional Services. Additional services outside normal operating hours. shall be considered extra services. Additional services as authorized in writing by City or its designee will be paid for on an individual basis at the regular revenue vehicle mileage rate for Price Formula A as set forth in Paragraph 5 of this Agreement and will be billed separately from this Agreement. Compensation for additional services shall be in excess of the maximum price defined in the Maximum Obligation as set forth in Paragraph 4 of this Agreement. 41. Changes in Scope-of-Work. City, without invalidating the contract, may order additions to or deletion of service hours for fixed route services or deletions for the work to be performed. If justified, the contract charges will be adjusted accordingly. Any alteration(s) made in the provisions, which are part of this contract shall not operate to release any surety or sureties from liability or any bond(s) or Letter(s) of Credit (LOC) attached thereto and make a part thereof. New provisions must be mutually agreeable to City and Contractor. City shall have the right to make changes in routes, schedules, and other elements of work not involving extra cost and not inconsistent with the work to be performed. In addition, City may make alterations or additions in routes or schedules to respond to the demands and special events and other occurrences, provided that if additional justified costs to Contractor results therefrom, extra payment will be made by City in an amount equal to the extended revenue vehicle mileage rate specified in the contract or as may be other wise agreed to by City and Contractor in advance of such extra work. 42. Conflicting Use. Contractor shall not use any vehicle, equipment, personnel or other facilities, which are dedicated by City for performing services under this Agreement for any use whatsoever other than provided for in this Agreement. 43. Liaison. Contractor shall assist and cooperate with City in meeting the objectives of providing quality public transportation services. Contractor shall perform close liaison activities, coordination and cooperation with City on matters related to operations, monitoring, reporting, and service performance measurements. 44. Failure to Perform. City recognizes that the operation of a public transit.service is subject to circumstances and variables beyond the control of Contractor. However, a properly run service will take steps to reasonably accommodate such circumstances without compromising the safety or reliability of the service. City and Contractor will monitor service performance to assure that strict adherence of routes and schedules are being maintained. If performance is found to be substandard, City may request in writing adequate assurance of performance as defined under Paragraph 37 of this Agreement, and subject to Service Performance Standards in Section 3.25. GATransit\Transit Current Projects\Operations RMProcurement Period\Agreement.doc Contractor understands that continual substandard performance such as service runs departing ahead of schedule, missed service runs, service runs departing scheduled stops fifteen minutes or more after the scheduled time, frequent accidents and safety violations, frequent vehicle failure and frequent public complaints regarding driver behavior or dirty vehicles are grounds for termination of this Agreement. 45. Liquidated Damages. Liquidated damages may be assessed as described in Exhibit A, Scope-of-Work. 46. Waivers. Neither City's review, approval or acceptance of payment for the services required under this Agreement shall be construed to operate as a waiver of any rights under Agreement or of any cause of action arising out of the performance of the Agreement, and Contractor shall be and remain liable to City in accordance with applicable law for all damages to City caused by Contractor negligent act, error or omission in the performance of any of the services furnished under this Agreement. The parties agree that City shall have the final authority to require the discharge by Contractor of any employee of Contractor. The waiver by City of any breach of any term,'covenant, condition.or agreement herein contained shall not be deemed to be a waiver of any subsequent breach of the same or of a breach of any other term, condition or agreement herein contained. 47. Interpretation, Jurisdiction, and Venue. The contract shall be construed and interpreted solely in accordance with the laws of the State of California; venue or any suit, right or cause of action arising under or in connection with this Agreement shall be exclusively in San Luis Obispo, California. 48. Severability. If any provision of this Agreement or the application thereof to any person or circumstances is rendered or declared illegal for any reason or shall be invalid or unenforceable, the remainder of the Agreement and application of such provision to other persons or circumstances shall not be affected thereby but shall be enforced to the greatest extent permitted by applicable law. The parties agree to negotiate in good faith for a proper amendment to this Agreement in the event any provision hereof is declared illegal, invalid, or unenforceable. 49. Debarred Bidders. The Contractor agrees to obtain certifications on debarment and suspension from its third party contractors and subcontractors and otherwise comply wit U.S. Department of Transportation regulations, "Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grant)", in compliance with 49 C.F.R. Part 29 and FTA Grant Agreement, Part II. Sec. 114(m). A certificate must be completed and submitted with the bid (Refer to Certification 2.4). 50. General Equipment Requirements. Above Grade Fueling Facility. The Contractor, at its sole discretion and its own expense, may decide-to purchase and install an above grade fuel storage for all engine types with the exception of compressed natural gas (CNG). In the event that the GATm iATransit Curren Projects\Operations RMProcurement PeriodWgreement.doc Contractor should decide to exercise this option, Contractor shall comply with all associated federal, state and local, but not limited to, regulations, and monitoring requirements. Contractor shall be responsible for all associated costs to the preparation of all applications, permits, and licenses to the above grade fuel storage facilities. In addition, the Contractor shall be responsible for all associated costs for the installation and construction of infrastructure and all other costs for the installation of the above grade fuel storage facilities. The Contractor shall, at its own expense, be responsible for all regulatory permits, maintenance, and all other costs of operating and using the above grade fueling facilities. Contractor shall assume all environmental responsibility associated to the fuel facility and indemnify the City for any responsibility of environmental contamination, fines, and/or damage associated to the fueling facilities. In the event that the Contractor should exercise this option, the Contractor will be subject to all city and local requirements associated to the purchase and installation of above grade fueling facility. The.City reserves the right to either offer a price for ownership or require Contractor to remove above-grade fueling facilities and return property to equal or better condition to City's satisfaction prior to the effective date of the Contract. Provision of Electronic Registering Fareboxes. Contractor agree to purchase and install electronic registering fareboxes with transfer dispenser for each revenue vehicle and the associated hardware and software, money counter, and vault system in accordance with Appendix F in Exhibit B of this Agreement. Contractor agrees that all equipment shall be factory new or like-new with full manufacturer's warranty and shall be approved by City. Contractor agrees that all electronic registering fareboxes and associated equipment shall be the sole property of the City after installation and upon acceptance in writing from the City. City will conduct acceptance inspection, which may include functional testing prior to acceptance. Upon the expirationof the Contract, the Contractor agrees, at the City's sole discretion and reserved right,. the City may return all electronic registering fareboxes and associated equipment and the Contractor will reimburse the City the full purchase price of electronic registering fareboxes and associated equipment per Form 1.5 Exhibit B of this Agreement. 51. Public Contact Code Section 10162 Questionnaire. In accordance with Public Contract Code Section 10162, the Contractor shall complete under penalty of perjury. The questionnaire must be completed and submitted with the bid (Refer to Certification 2.9). 52. Integrity Certification. Contractor must include, with their proposal, properly completed and executed certification regarding Lower Tier Debarment, Suspension and other Responsibility Matter. A certificate must be completed and submitted with the bid (Refer to Certification 2.6). GATransit\Trattsit Current Projects\Operations_RMPmcurement Perio&Agr=ment.doc o?-a7 i 53. Energy Conservation. The Contractor shall comply with mandatory standards and policies relating to energy efficiency that are contained inapplicable State energy conservation plans issued in compliance with the Energy Policy and Conservation Act, 42 USC 6321 et seg. 54. Air Pollution. The Contractor may be required to submit evidence to City that the governing air pollution criteria will be met. The evidence and related documents will be retained by the Contractor for on-site examination by FTA. 55. Notice of Federal Requirements. The Contractor understands that Federal laws, regulations, policies, and related administrative practices applicable to the Agreement on the date the Agreement is executed may be modified from time to time. The Contractor agrees that the most recent. of such Federal requirements will govern the administration of this Agreement at any particular time, except if there is sufficient evidence in the Agreement of a contrary intent. Such contrary intent might be evidenced by express language in letters including those signed by the FTA Administrator. Likewise, new Federal laws, regulations, policies and administrative practices may be established after the date the Agreement has been executed and may apply to this Agreement. All standards or limits set forth in this Agreement to be observed in the performance of the project are minimum requirements. 56. Environmental Violations. The Contractor agrees to comply with all applicable standards, orders or requirements issued under Section 306 of the Clean Air Act [42 USC 1857 (h)], Section 508 of the Clean Water Act (33 USC 368. Executive Order 11378, and Environmental Protection Agency (EPA) regulations (40 CFR, Part 15) which prohibits the use under nonexempt Federal contracts, grants or loans, of facilities included on the EPA List for Violating Facilities. The Contractor shall report. violations to FTA and the US EPA Assistant Administration for Enforcement. 57. Privacy. The Contractor and its employees shall comply with the Privacy Act of 1974, 5 USC. 552a, and FTA Grant Agreement, Part 11, Section 125. 58. Arbitration. In the case of any controversy between the parties concerning but not limited to the validity, construction or interpretation of this Agreement, the parties shall refer such dispute in writing to an arbitrator. Each party shall appoint one person to hear and determine the dispute and, if the two persons so selected are unable to agree, those two persons shall select a third impartial arbitrator whose decision shall be final and conclusion upon both parties. The cost of arbitration shall be borne by the losing party or in such proposition as the arbitrator decides. The arbitrator may hold meetings, hearings, and take testimony of witnesses and receive evidence, by shall not be empowered to compel the attendance of any person or the production of any evidence. The result of arbitration hereunder shall be binding upon the parties. 59. Disclosure of Lobbying Activities. The Contractor agrees to comply with the provisions of 31 USC 1352, which prohibit the use of Federal funds for lobbying any official or employee of any Federal agency, or member or employee of Congress; and GATransiffransit Current Projects\Operations RMProcum.ment PeriodWgreement.doc requires the Contractor to disclose any lobbing of any official or employee of any Federal agency, or member, or employee of Congress in connections with Federal assistance. The Contractor agrees to comply with United States Department regulations, "New Restrictions on Lobbying," 49 CFR Part 20. A certificate must be completed and submitted with the bid (Refer to Certification 2.5). 60. Non-Collusion Affidavit. By submitting a proposal, the prospective Contractor represents and warrants that such a proposal is genuine and not a sham, collusive, or made in the interest or in behalf of any person or party not therein named and that the prospective Contractor has not directly or indirectly induced or solicited any other Contractor to put in a sham bid, or any other person, firm or corporation to refrain from presenting a proposal and that the prospective Contractor has not in any manner sought by collusion to secure an advantage. If it is found that collusion exists, proposals will be rejected and contract awards shall be null and void. A certificate must be completed and submitted with the bid (Refer to Certification 2.1). 61. Interest of Members of or Delegates of Congress. No member of or delegate to the Congress of the United States shall be admitted to any share or port of this contract or to any benefit arising therefrom. 62. Drug-Free Workplace. The Contract shall comply with Government Code Section 8355 in matters relating to providing a drug-free workplace. A certificate must be completed and submitted with the proposal (Refer to Certification 2.3). 63. Contractor's Representations. The Contractor certify that they are familiar with all requirements of the general conditions, specifications and instructions of the City Transit System. The Contractor is familiar with all matters affecting the performance of the work, including all general and special laws, ordinances and regulations that may affect the work, its performance or those persons employed therein. The Contractor is in the business and is fully qualified and skilled in the field of public transit and is fully willing and able to satisfy the requirements of the contract at the bid rates and any ward of contract is 'in reliance on such representations. It shall be the Contractor's responsibility to adhere to all federal, state, and local laws regarding the proposed service contract. 64. Contractor's Eligibility. Contractor certifies it is not on the Comptroller General's list of ineligible contractors. 65. Program Fraud and False or Fraudulent Statements and Related Acts. The Contractor acknowledges that the provisions of the Program Fraud Civil Remedies Act of 1986, as amended, 31 U.S.C. § § 3801 et M. and U.S. DOT regulations, "Program Fraud Civil Remedies," 49 C.F.R. Part 31, apply to its actions pertaining to this Project. Upon execution of the underlying contract, the Contractor certifies or affirms the truthfulness and accuracy of any statement it has made, it makes, it may make, or causes to be made, pertaining to the underlying contract or the FTA assisted project for which this contract work is being performed. In addition to other penalties G:\Tr sit\Tmnsit Current Projects\Opemtions RFP\Pmcumment Peiod\Agmement.doc that may be applicable, the Contractor further acknowledges that if it makes, or causes to be made, a false, fictitious, or fraudulent claim, statement, submission, or certification, the Federal Government reserves the right to impose the penalties of the Program Fraud Civil Remedies Act of 1986 on the Contractor to the extent the Federal Government deems appropriate. The Contractor also acknowledges that if it makes, or causes to be made, a false, fictitious, or fraudulent claim, statement, submission, or certification to the Federal Government under a contract connected with a project that is financed in whole or in part with Federal assistance originally awarded by FTA under the authority of 49 U.S.C. § 5307, the Government reserves the right to impose the penalties of 18 U.S.C. § 1001 and 49 U.S.C. § 5307(n)(1) on the Contractor, to the extent the Federal Government deems appropriate. The Contractor agrees to include the above two clauses in each subcontract financed in whole or in part with Federal assistance provided by FTA. It is further agreed that the clauses shall not be modified, except to identify the subcontractor who will be subject to the provisions. 66. Governing Law. The rights, obligations, and remedies of the parties shall be governed by the laws of the State of California. Whenever there is no applicable state statute or decisional precedent governing the interpretation of, or disputes arising under or related to, this contract, then Federal common law, including the law developed by Federal boards of contract appeals, the United States Claims court (formerly the Court of Claims), and the Comptroller General of the United States, shall govern. Venue of any action shall lie exclusively in the County of San Luis Obispo, California. This is the complete agreement between the parties. If any provision of the contract is fund to be invalid or unenforceable, the remaining provisions shall not be impaired. 67. Patent Rights. FOR ALL PLANNING, RESEARCH, DEVELOPMENT, OR DEMONSTRATION UNDER THIS CONTRACT OR PROJECT: If any invention, improvement, or discovery of City or any of its third party contractors is conceived or first.actually reduced to practice in the course of or under this Project, and that invention, improvement, or discovery is patentable under the laws of the United States of America or any foreign country, City shall notify FTA immediately and provide a detailed report. The rights and responsibilities of City, its third party contractors and the Government with respect to such invention, improvement, or discovery, will be determined in accordance with applicable Federal laws, regulations, policies, and any waiver thereof. Any patentable result arising out of this contract, as well as all information, designs, specifications, know-how, data, and findings shall be made available to City and the government for public use, unless the Department of Transportation shall, in a GATtansit\Transit Current Projects\Operations RMProcurement Period\Agreement.doc a�� specific case where it is legally permissible, determine that it is in the public interest that it not be so made available. If in accordance with this agreement, the Contractor furnishes research, development or consultative services in connection with the work and, if in the course of such research, development or consultation patentable subject matter is produced by the vendor, its officers, agents, employees, subcontractors, or suppliers, City shall have without cost or expense to it, an irrevocable, non-exclusive, royalty-free license to make, have made, and use, either itself or by anyone on its behalf, such matter in connection with any activity now or hereafter engaged in or permitted by City. . Promptly, upon request by City, the Contractor shall furnish or obtain from the appropriate person a form of license satisfactory to City, but it is expressly understood and agreed that, as between City and the Contractor, the license herein provided for shall nevertheless arise for the benefit of City, immediately upon the production of said subject matter, and shall not await formal exemplification in a written license agreement, as provided above. Such license may be transferred by City to its successors, immediate or otherwise, in the operation or ownership of any facility now or hereafter operated by City, but'such license shall not be otherwise transferable. 68. Attorneys' Fees. Should either party institute any action to enforce this Agreement, or any provision hereof,'the prevailing party in any such action or proceeding shall be entitled to receive from the other party all costs and expenses,, including reasonable attorney's fees. 69. Year 2000 Compliance. In addition to the warranties specified in this agreement, the contractor warrants that any equipment, internal or external component, device, or software Product(s) supplied under this agreement that process any date-time data will continue to accurately process the date-time data from, into, and between the years 1999 and 2000 and beyond, including leap year calculations. Where this agreement requires that other products purchased under this agreement must perform as a package or system, the product(s) will be Year 2000 Compliant as a system. In the event of any breach of this warranty, the Contractor shall restore the Products(s) to the same level of performance as stated herein, or repair or replace the Product(s) with conforming Product(s) so as to minimize interruption to the Authority's ongoing business process, time being of the essence, at Contractor's sole cost and expense. The Contractor shall not be responsible to correct errors in the Authority's data entry or data conversions. For Third Party Product(s), software and hardware manufactured or developed by a corporate entity independent from Contractor and provided by Contractor on a non- exclusive licensing or other distribution Agreement with the third party manufacturer, the Contractor has obtained a warranty of Year 2000 Compliance from the Third Party Manufacturer and shall pass through said Third Party Manufacturer's warranty of Year 2000 Compliance to the Authority. GATransiffransit Current Projects\Opemtions RMProcurement PeriodWgreement.doc C 70. Recycled Products. The contractor agrees to comply with all the requirements of Section 6002 of the Resource Conservation and Recovery Act (RCRA), as amended (42 U.S.C. 6962), including but not limited to the regulatory provisions of 40 CFR Part 247, and Executive Order 12873, as they apply to the procurement of the items designated in Subpart B of 40 CFR Part 247. 71. Access Requirement for Individuals with Disabilities. The Contractor shall comply with all applicable requirements of the "Americans With Disabilities Act of 1990" (ADA), 42 U.S.C. Sections 12101 et seq.; section 504 of the 'Rehabilitation Act of 1973", as amended, 29 U.S.C. Section 794; section 16 of the Federal Transit Act, as amended, 49 U.S.C. app. Section 1612; and the following regulations and any amendments thereto: 1, U.S. DOT regulations, "Transportation . Services for Individuals with Disabilities (ADA),"49 C.F.R. Part 37; 2. U.S. DOT regulations, 'Nondiscrimination on the Basis of Handicap in Programs and Activities Receiving or Benefiting from Federal Financial Assistance," 49 C.F.R. Part 27; 3. U.S. DOT regulations," Americans With Disabilities (ADA) Accessibility Specifications for Transportation Vehicles," 49 C.F.R. Part 38; 4. Department of Justice (DOJ) regulations, "Nondiscrimination on the Basis of Disability in.State and Local Government Services," 28 C.F.R. Part 35; 5. DOJ regulations, 'Non=discrimination on the Basis of Disability by Public Accommodations and in Commercial Facilities," 28 C.F.R. Part 36; 6. General Services Administration regulations, "Accommodations for the Physically Handicapped," 41 C.F.R. Subpart 101-19; 7. Equal Employment Opportunity Commission, 'Regulations to Implement the Equal Employment Provisions of the Americans with Disabilities Act," 29 C:F.R. Part 1630; 8. Federal Communications Commission regulations, "Telecommunications Relay Services and Related Customer Premises Equipment for the Hearing and Speech Disabled," 47 C.F.R. Part 64, Subpart F; and 9. FTA regulations, "Transportation For the Elderly and Handicapped Persons," 49 C.F.R. Part 609. GATransit\Transit Current Projects\Operations RMProcurement Period\Agreement.doc WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their respective officers thereunto duly authorized on the day written below their signatures. BY CITY this day of_ , 2001. BY CONTRACTOR the day of , 2001. CONTRACTOR CITY By; By: Mayor, City Council ATTEST: ATTEST: By: By: City Clerk APPROVE AS TO FORM: APPROVED AS TO FORM: By: By: Contractor Legal Counsel t ga Cou 1 GATransit\Transit Curren_t Projects\Operations RMProcurement Period\Agreement.doc 3-3 i Attachment 2 What was the process for determining the contractor for these services? 1. Schedule • Solicitation December 13, 2000 • Pre-Proposal meeting January 9, 2001 • Written Proposal Clarification Q&A January 17, 2001 • Proposals Submission Date —received 3 proposals (Laidlaw, First, Coach) February 9, 2001 2. Ranking of Proposals • Written Proposals were reviewed by a City selection committee comprised of: (Transit Manager, Public Works Administration, Public Works Maintenance, Finance and City Attorney's office) • Ranking Criteria were: a) Financial stability and capabilityof the Contractor b) Completeness of the proposal and compliance with the terms of the RFP c) Cost of contractual services d) Proven transit management and operational capabilities and experience e) Large and small diesel bus maintenance experience f) Qualifications of staff proposed g) Creative ideas proposed to maximize safe and efficient transit operations h) Contractor's ability to coordinate a smooth transition. 3. Transit Team Interviews • Interview panel consisted of the aforementioned selection committee with the exception of the representative from the City Attorney's office. • Proposal teams were given the opportunity to clarify their understanding of the contract and project services and show their enthusiasm for the project • The proposal teams were queried for their understanding of particular issues relates to SLO Transit, the City and how their companies would become of of the City • Individual proposal members, particularly the proposed Resident Managers, were encouraged to expand upon their history and experience, and their innovative thoughts about the SLO Transit system and City services. • Company profiles were reviewed, particularly the financial status of each organization, to determine stability, similar services that they currently provide elsewhere, and employee organization values. 4. Final Ranking criteria were then used to determine the qualitative best company to conduct final negotiations with. These criteria included: • Most responsive proposal • Written and oral proposal rankings • Proposed costs to run the services • Organizational attitude, performance and vitality • Company financial status and stability a-3� Memorandum Attachment 3 March 23,2001 TO: Mike McCluskey,Director of Public Works FROM: Bill Statler, Director of Finance Carolyn Dominguez,Accounting Manager SUBJECT: TRANSIT SERVICE PROPOSALS: LAIDLAW'S FINANCIAL STATUS Carolyn Dominguez recently participated on the team responsible for reviewing the three proposals we received for transit services. As part of this review process, we required audited financial statements. One of the proposers—Laidlaw—received a "going concern" opinion from their auditor (PricewaterhouseCoopers LLP, one of the "Big Five" audit firms) on their most recent audit report for the year ended August 2000. A "going concern" opinion is the one of the most serious that an auditor can express, and it is never made lightly. It formally puts the reader of the financial statements on notice that the auditor doubts the ability of the company to continue operations. In Note 1 in the Notes to Consolidated Financial Statements, the auditor states: "These consolidated financial statements have been prepared on a "going concern" basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of operations. There is substantial doubt about the company's ability to continue as a"going concern"based on the present financial position of the Company as described below." During the oral interview phase of the proposal reviews, Laidlaw representatives stressed that while the parent company was having financial difficulties (and taking significant steps to correct them), the transit side of Laidlaw was sound. While this may be true (it is not possible to confirm from the consolidated statements), the transit service component of their overall operations (which also include hazardous materials handling, ambulance services, Greyhound and health care services) is not a legally distinct part of their company; as such, even if the transit services are financially successful, this will not keep the company from failing if there are substantial losses from these other operations. CONCLUSION In contracting with a transit operator, one of our fundamental goals is to provide for stable operations over a multi-year term. An essential building block for this is a financially viable contactor who is likely to be in business over the contract-term. Since we received two other acceptable proposals from firms who are financially sound, we believe the City would be exposing itself to unnecessary risk by entering into a multi-year contract with Laidlaw. G:Transit Fund/Laidlaw Going Concern